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Iceland's External Affairs from 1400 to the Reformation: Anglo-German Economic and Societal Shelter in a Danish Political Vacu

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Iceland's External Affairs from 1400 to the Reformation: Anglo-German Economic and Societal Shelter in a Danish Political Vacu n Fræðigreinar STJÓRNMÁL & STJÓRNSÝSLA Iceland’s External Affairs from 1400 to the Reformation: Anglo-German Economic and Societal Shelter in a Danish Political Vacuum Baldur Þórhallsson, Professor of Political Science, University of Iceland, and Þorsteinn Kristinsson, Research Assistant, University of Iceland Abstract The paper applies the assumption that small states/entities need economic and political shelter in order to prosper, to the case of Iceland in the period from 1400 to the Reformation in the mid-16th century. Also, it applies the findings from the first paper in this ‘hexalogy’ (a six-paper series) on Iceland’s external relations in a historical context, i.e. that Iceland enjoyed societal shelter in the Middle Ages, to this period. The aim is both to analyse whether or not Icelanders enjoyed economic, political and societal cover from their engagements with the Danes, English and Germans and to evaluate the validity of the ‘shelter theory’. The paper argues that Iceland enjoyed considerable economic and societal shelter from its encounters with English and German merchants and fishermen in a period in which Danish political cover was formally in place but was not effective in practice. Moreover, the paper claims that the shelter theory, and small-state studies in general, need to take notice of the importance of social communication with the outside world for a small entity/state. Also, the Danish political vacuum in our late Medieval Period provided the islanders with economic opportunities and social engagements with the wider world. This was at the cost of continued domestic clashes between the islanders themselves, on the one hand, and between them and ‘outsiders’ on the other. Our findings indicate that in the case of Iceland there might be a trade-off between the Icelandic Review of Politics and Administration Vol. 9, Issue 1 (113-137) © 2013 Contact: Baldur Þórhallsson, [email protected] Article first published online June 26th 2013 on http://www.irpa.is Publisher: Institute of Public Administration and Politics, Gimli, Sæmundargötu 1, 101 Reykjavík, Iceland Stjórnmál & stjórnsýsla 1. tbl. 9. árg. 2013 (113-137) Fræðigreinar © 2013 Tengiliður: Baldur Þórhallsson, [email protected] Vefbirting 26. júní 2013 - Birtist á vefnum http://www.stjornmalogstjornsysla.is Útgefandi: Stofnun stjórnsýslufræða og stjórnmála, Gimli, Sæmundargötu 1, 101 Reykjavík This work is licensed under a Creative Commons Attribution 3.0 License. 114 STJÓRNMÁL Fræðigreinar & STJÓRNSÝSLA benefits of strict political cover by a single external actor, and the economic and societal opportunities accompanied by a lack of political affiliations. Keywords: Iceland, small states, international relations, shelter, economy, culture, politics, late Middle Ages. Introduction The aim of this paper is to examine whether Iceland’s external relations provided its inhabitants with political, economic and societal shelter in the period extending from the beginning of the 15th century to the Reformation in the mid-16th century. This is the period often referred to as consisting of ‘the English Age’ and ‘the German Age’ in Icelandic historiography because of the extent of maritime contact between those countries and Iceland at the time. The period was preceded by ‘the Norwegian Age’ in which Iceland’s external relations were almost exclusively conducted through the Norwegian kingdom and would be succeeded by ‘the period of Danish rule’ in which Iceland, again, narrowed its horizon and largely confined its external relations to Den- mark. The English and German Ages were therefore a time in which Iceland’s external relations were quite complex and diverse compared to the other eras. This is the second paper1 in a ‘hexalogy’: six papers2 dedicated to the study of Ice- land’s external relations from the Settlement to the present. The aim is twofold. Firstly, it is to locate Iceland in the framework of small-state theory by examining whether Ice- land has enjoyed external shelter from other states/entities during its history. Secondly, Iceland’s engagement with the outside world is used as a case study in order to evaluate the theory that small states/entities need external shelter to thrive, economically and politically. The literature on small states in international relations has generally considered small states to be in need of a protecting power or an alliance in order to prosper (see, e.g., Thorhallsson 2011). There are two main reasons for this. Firstly, small states are more dependent on foreign trade than large states because of the small size of their domestic market and relatively concentrated production. In order to achieve economies of scale, they tend to specialise in producing very few products – the bulk of which need to be exported – and in turn need to import many products that larger states can produce do- mestically (Katzenstein 1985). Secondly, small states have more limited means to defend themselves compared with their larger neighbours (Vital 1967, 152-154). They therefore often seek security from larger states or through multilateral alliances (Rothstein 1968, 36-37). Hence, small states need protection in order to withstand stress due to their more limited resources as compared to larger states (Vital 1967). According to Baldur Thor- hallsson (2011), the importance of shelter is related to three interrelated features: reduc- tion of risk in the face of a possible crisis event; help in absorbing shocks during a crisis situation; and assistance in dealing with the aftermath of the crisis. The shelter theory distinguishes between economic and political shelter. Political shelter takes the form of direct and visible diplomatic or military backing, and other strategic coverage, in any Iceland’s External Affairs from 1400 to the STJÓRNMÁL 115 Reformation & Baldur Þórhallsson and Þorsteinn Kristinsson STJÓRNSÝSLA given time of need by another state or an international organization, and/or organiza- tional rules and norms. Economic shelter consists of direct and/or indirect economic assistance such as that provided by a common market. Importantly, the first paper in the series (Baldur Þórhallsson 2012) concluded that Iceland’s external shelter consisted of three elements: economic shelter, political shelter and societal shelter. The traditional small-state literature has usually only addressed the importance of economic and political shelter. The additional inclusion of societal shel- ter is therefore a supplement to small-state theory – an innovation that will be pursued further in this paper. This is in line with Rokkan and Urwin’s (1983) historical account of the importance of centre-periphery relations in their attempts to explain state-building in Western Europe. They combine political, economical and cultural features in order to explain state-building and argue that cultural transactions, in terms of transfer of mess- ages, norms, lifestyles, ideologies, myths and ritual systems, are important in constructing the centre-periphery relations. For instance, they claim that long distances make cultural communications more difficult and increase the likelihood of a separate identity. To be clear, it is not being suggested that relations between small and large entities are always favourable for the smaller entity, and certainly not that the larger entity acts out of some kind of altruism. For instance, Vital (1967, 79) argues that ‘where the quest for protection and insurance is successful a price must normally be paid in terms of sacrifice of autonomy in the control of national resources and loss of freedom of political maneuver and choice’. Hence, protection often comes at a certain cost. For instance, the political and economic shelter of the European Union involves adopting the protector’s rules and norms (Bailes & Thorhallsson 2013; Katzenstein 1997). Also, international financial institutions’ aid is often given with preconditions regarding states’ domestic policies, and NATO cover may carry considerable costs related to its application (Bailes & Thorhallsson 2013). One state’s dominance over another may include severe economic, political and societal costs, as is shown by numerous historical examples. The ultimate price a small state/entity would pay for cover would be for it to become part of the protector’s territory without any means of controlling its own affairs. We will define shelter as those external relations that are favourable to the small en- tity – in our case Iceland – according to the shelter theory presented above. Of course there were always external relations that were harmful to Icelanders over the years, and these will be identified as well. The validity of the theory then depends on whether the benefits of external relations are greater than the costs and whether the relations were actively sought after by Icelanders themselves. However, there is another factor that may complicate the theory. Iceland, like other societies, was divided into different groups that sometimes had conflicting interests. In a relatively stable society, the sudden influx of foreign influence can upset the prevailing social structure, providing positive opportunities for certain segments of the population while alienating others. Such seems to have been the case during the period under study as economic opportunities for the general public engendered by the presence of for- eigners undermined the position of the farming elite in the agrarian economic structure. 116 STJÓRNMÁL Fræðigreinar & STJÓRNSÝSLA The ‘shelter theory’ therefore needs
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